Research On The Independent Director Serve Locally And The Quality Of Internal Control

As a new important area of economics,geography economics has gradually been introduced into the research category of accounting.The related research on the influence of geographical distribution of enterprises on financial decision-making and the influence of the geographical characteristics of the board of directors on corporate governance has begun to be affected.Domestic and foreign experts and scholars have paid extensive attention.This article intends to explore whether the indepen dent director's local appointment will affect the quality of internal control of the company.In China,it is very common for independent directors to serve themselves locally.According to theoretical analysis,the independent director 's local appointment can more effectively acquire and grasp the relevant information of the company,and the economic cost and time cost incurred when participating in the board of directors will be lower,and have natural advantages in monitoring costs and information acquisition.To play a better role in supervising the implementation of internal control.Based on this,this paper attempts to proceed from the regional characteristics,taking the A-share listed company as a research sample from 2012 to 2015,and empirically testing the relationship between the local position of independent directors and the quality of internal control.The research idea of this paper is,first of all,collate and analyze the relevant literature on the function of independent directors and the influence of independent directors on the quality of internal control of the company,and summarize the relevant research on the regional characteristics of independent directors,based on the previous studies.To establish the research theme of this article.Secondly,this paper analyzes the influence process of the independent director's local service on the internal control quality of the company through the theory of resource dependence,principal-agent theory and social capital theory.The theoretical analysis shows that the local employment of independent directors can positively promote the quality of internal control.Finally,this article uses information collected manually from all A-share listed companies during the period from 2012 to 2015,and ex amines the impact of the independent director's local appointment on the quality of the company's internal control from the proportion of local independent directors,and further discusses local appointments.The effect of independent directors on the qual ity of internal control in different positions.The empirical research results provided in this paper show that the independent director's local service and the quality of internal control are positively related to each other and play a positive role in pr omoting the quality of internal control.That is,the higher the proportion of independent directors who serve in the local company,the higher the proportion of independent directors.The higher the control quality index,the better the internal control quality.Further study of the duty performance environment of local independent directors,and the conclusion obtained from the perspective of the company's shareholding structure shows that among the enterprises with better equity checks and balances,the role of local independent directors in promoting the quality of internal control is more significant;and,In the state-controlled enterprises and non-state-controlled enterprises,the independent director 's local appointment has a more significant role in promoting the quality of internal control.Based on an empirical study,this article proposes relevant suggestions for improving China's independent director mechanism:(1)From the enterprise level,companies can make reasonable choices based on the geographical characteristics of independent directors,according to their actual conditions,development strategies,and target systems.The requirements of the general requirements,etc.,comprehensive consideration of the characteristics of independent directors in terms of geographical location,background,and social relations make the company's independent director system and internal control system truly play a role.(2)For the regulatory agencies,the research conclusions of this paper can be the theoretical and empirical support for the development,modification,and improvement of relevant policies.From the establishment of the independent director system in China,the regulatory agencies have been exploring and improving the relevant policies for indepe ndent directors.The internal control system needs to establish an independent director system that can better meet the needs of the society and the needs of enterprises in China.The conclusions of this study can provide a basis for this and have positive reference significance for improving China's independent director system and internal control system and promoting the healthy development of China's capital market.